Denis Naughten (Roscommon-South Leitrim, Independent)
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915. To ask the Minister for Agriculture, Food and the Marine if he will review the decision to roll the sheep grassland payment into the new single farm payment in view of the fact that the benefit of the grassland scheme will be lost through the approximation clawback; if his attention has been drawn to the fact that small sheep holdings currently under the €5,000 threshold could be penalised if the sheep grassland top-up pushes them over this threshold; his plans for a sheep headage scheme to support the sector; and if he will make a statement on the matter. [14091/14]

Simon Coveney (Cork South Central, Fine Gael)
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In developing the shape of the new system of Direct Payments in Ireland, I have been very conscious of the needs of sheep farmers, in particular those who farm on hill and commonage land. In general sheep farmers holds low value entitlements under the current Single Payment Scheme and will benefit significantly from the model of convergence that is to be applied in Ireland where those with a low Initial Unit Value will see the value of their entitlements increase over the period of the scheme.

The Grassland Sheep Scheme is based on Article 68 of the current EU Regulation 73/2009 which governs direct payments in the form of the Single Payment Scheme. As of the 1 January 2015 that Regulation is superseded by EU Regulation 1307/2013 and consequently there is no longer any legal basis for the continuation of the Grassland Sheep Scheme in its present form.

When determining the Initial Unit Value of a farmer’s entitlements under the Basic Payment Scheme in 2015, Regulation 1307/2009 gives Member States the option to take into account any payment the farmer received in 2014 under Article 68 schemes such as the Grassland Sheep Scheme. This option is only available where the Member State is not applying voluntary coupled support to the sector concerned under the new CAP.

I have decided to apply this provision in Ireland as a means of safeguarding the value of the payments received under the Grassland Sheep Scheme for those farmers concerned. The Grassland Sheep Scheme is the only Article 68 scheme that is being incorporated into the calculation of entitlements under the new Basic Payment Scheme. If such incorporation does not take place the value of such payments would simply remain in the national fund and would be redistributed generally among all farmers who establish entitlements.

The incorporation of the Grassland Sheep Scheme payment into the calculation of a farmer’s Initial Unit Value in 2015 will obviously result in a higher entitlement value for the farmers concerned from the start of the Scheme rather than relying solely on the gradual process of convergence to increase the unit value over the five year period up to 2019. Our analysis confirms that as a result of this provision the group of farmers who receive the Grassland Sheep Scheme will experience immediate benefit as part of their payment under the Basic Payment Scheme.

The incorporation of the Grassland Sheep Scheme payment into the calculation of a farmer’s

Initial Unit Value in 2015 will not affect the Linear Cut to the value of existing single payment scheme entitlements in 2014.

Over the past two years sheep numbers have stabilised and while the breeding flock declined slightly in 2013, a return to growth is expected in 2014. I was pleased to note that for the third consecutive year Irish sheep throughput grew, reaching 2.61 million head, a rise of 7%. These developments led to sheepmeat production rising by around 3% to stand just over 55,000 tonnes. The total value of Irish sheepmeat exports is estimated to have increased by over 4% in 2013 to reach €220m.